Canada Government Budget Deficit Widens in August

2025-10-31 20:43 By Felipe Alarcon 1 min. read

Canada’s government posted a budget deficit of CAD 3.28 billion in August 2025, compared with a deficit of CAD 2.5 billion in August 2024.

This shift largely reflected a CAD 2.3 billion (6.5%) increase in revenues, driven by higher corporate and personal income tax and customs import duties, while pollution pricing fell by CAD 0.9 billion following the cessation of the federal fuel charge.

Program expenses, excluding net actuarial losses, rose by CAD 3.0 billion (9.1%), reflecting higher direct program expenses, major transfers to persons, and transfers to provinces, territories, and municipalities.

Public debt charges fell by CAD 0.1 billion (1.5%) as lower interest rates on treasury bills and reduced net interest on cross-currency swaps were largely offset by higher average effective rates on an increased stock of marketable bonds; for the April–August 2025–26 period, the federal budget deficit stood at CAD 11.1 billion, compared to CAD 9.8 billion in the same period of 2024–25.



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